The struggle with municipal water rates in response to conservation

The downside to the remarkable water conservation I’ve been writing about (see yesterday’s Albuquerque numbers, for example) is revenue. Water utilities sell water. If people use less water, water utilities make less money. One option is to shift to more fixed-costs pricing, charging a flat rate for service, but then you lose the behavioral incentive of price.

Tony Davis’s latest story out of Tucson is an example:

Tucsonans conserve so well that their usage — and Tucson Water’s revenue — has plummeted over the years, and that’s something the utility’s new director wants to fix. A specific proposal is a year away, but a new rate structure likely would reduce the utility’s dependence on revenue coming from monthly charges based on how much water a home or business uses. Under a scenario outlined by newly hired Tucson Water Director Timothy Thomure, a greater portion of customers’ bills would shift to the utility’s fixed charges, which stay the same regardless of how much water people use.

There’s pushback from water conservation advocates, who think that would lead to an increase in water use. Albuquerque used a similar approach a couple of years ago (higher fixed cost on my bill) and conservation continued, so maybe not? But the details matter. There’s a lot of room here for some detailed house-by-house, neighborhood-by-neighborhood number crunching to try to get a better understanding of the elasticity of demand and how that interacts with various pricing structures. Call in The Economists!

 

Albuquerque at 127 gallons per person per day – how low can cities go?

Albuquerque water use

Albuquerque water use

I’m giving a talk next week at the CLE Law of the River conference in Las Vegas about what I think is one of the two most important trends in western water management. The first, which we hear a lot about, is the pressure posed by climate change and drought. The second, which I don’t think gets enough attention, is the remarkable trends in water use by the region’s municipalities. They are going down everywhere. I think this is the salient feature of our water planning and management efforts.

I’ll have to update my slides (that’s a joke – I’ve got a week, you think I’ve started on my slides?) after this morning’s news that  Albuquerque’s 2015 water use came in at 127 gallons per capita per day. If you’re not a water numbers nerd, let me try to explain how remarkable that number is. In 1995, Albuquerque residents used 251 gallons per person per day. A major American city has cut its per person use of a critical resource by 49.4 percent in two decades:

“The last time overall water use was this low was in 1982,” Yuhas said. That’s especially impressive when you consider that the Albuquerque population in 1982 was about 366,000 and that the water utility serves more than 658,000 people today.

the throne

the 1.28 gallon per flush throne

There’s a lot going on here. On the indoor side, changing national appliance standards and incentives from the Albuquerque Bernalillo County Water Utility Authority mean that toilets, clothes washers, etc., are growing steadily more efficient, both in all new construction and as new fixtures replace new ones in existing buildings.

The real action, though, is outdoors. There, incentives and education by the water utility are entwined with changing community values about what we want Albuquerque to look like. As I wrote a couple of weeks ago, the bulk of those savings over the last two decades have come in outdoor water use, the “consumptive” portion of our water use that we use in our gardens. There is politics and policy here, but all the outdoor savings have been voluntary, a change in behavior and values that is happening one yard at a time.

The outdoor piece matters because indoor water use is fully reused in New Mexico’s middle Rio Grande – we put our treated effluent back into the river where it is available for use by downstream cities, farms, and the river ecosystem itself. When you look at the consumptive fraction, which I think is the most important measure, the outdoor conservation success over the last two decades provides Albuquerque with a remarkable buffer to try to ensure resilience in the face of the threat of climate change to our water supply.

El Niño and global food stress

Note to self: remember that El Niño isn’t just about enjoying a growing southwestern U.S. snowpack and pondering its implications on our 2016 water supply.

Across the horn of Africa (and many places around the world) people go hungry as a result. From SciDev.Net, a portal for global development issues:

The consequences of a lack of rain between June and September will be seen between now and March, during the main cropping season in northern East Africa. Traditionally, January marks the start of the harvesting period, when markets are usually replenished, but this year’s yields are predicted to be dire, and fodder scarce.

Their maps:

Food stress

Food stress

Groundwater success in the San Luis Valley

From the San Luis Valley of southern Colorado, Rio Grande headwaters, more evidence that ag communities can overcome the groundwater tragedy of the commons:

ALAMOSA — For the second year in a row, water officials have seen a recovery in one of the aquifers that farmers lean on heavily in the San Luis Valley. The unconfined aquifer, which is the shallower of the valley’s two major groundwater bodies, saw its volume increase by 119,000 acre-feet.

That bump follows an increase of 71,000 acre-feet from the year before.

That’s Matt Hildner in the Pueblo Chieftain.

How’d they do this? Cally Carswell did a great piece a couple of years ago in High Country News explaining:

Instead of denying or ignoring the problem, farmers are facing the fact that agriculture has outgrown its water supply. They admit they must live within new limits, or perish. Determined to avoid state intervention, they’ve created an innovative irrigation market, charging themselves to pump and using that money to pay others to fallow their land. Thousands of acres have come out of production, and their sights are set on fallowing tens of thousands more.

It’s a dry heat.

A trip down the Library of Congress photo archive rabbit hole this afternoon led me to a bold claim:

In his 1878 book Picturesque Arizona, Enoch Conklin quotes Dr. A. M. Loryea: “The heat in Arizona, though high, is endurable in consequence of the dryness.” This may be the granddaddy to Arizona’s most quoted weather phrase: “but it’s a dry heat, so you don’t mind it.”

That’s from Jim Turner’s Arizona: A Celebration of the Grand Canyon State.

Conklin was of that curious tradition of 19th century travel writing, and along a intriguing sub-thread suggested by his book’s title. The desert was strange and forbidding to Conklin’s east coast audience:

One important desert characteristic to be found largely in Arizona, is the lack of water.

Yet with the arrival of the Southern Pacific in Yuma (“A more propitious or favorably auspicious event will never probably be known in the history of that territory”, Conklin wrote), the desert was newly accessible in a way it had not been before, and Conklin positioned himself as part of a new literary tradition  when he described it as “picturesque” in his title. It’s a tradition enshrined in the Arizona Highways magazine of my childhood, but it was a fresh take in its day.

I stumbled to him after finding this intriguing image:

Looking up the Colorado River from Ehrenburg Creator(s): Conklin, E. (Enoch), photographer Date Created/Published: [S.l.] : Continent Stereoscopic Company, [ca. 1877]

Looking up the Colorado River from Ehrenburg
Creator(s): Conklin, E. (Enoch), photographer
Date Created/Published: [S.l.] : Continent Stereoscopic Company, [ca. 1877]

That’s the Colorado River around Blythe (Ehrenberg – I think it’s really spelled with an “e” – is on the Arizona bank across from Blythe), circa 1877. Conklin seems to have liked the place, and been enthusiastic for its future:

 

Arizona is the coming land of the artist, as well as of the miner and farmer.

A note on alfalfa export data

There’s a letter to the editor in the latest High Country News (it’s in the paper edition, can’t link yet) that repeats a California water myth that’s just flat wrong – the California Supergiant Alfalfa Water Use Export Myth.

Alfalfa alone is using more water than all the other water uses combined, and most of it is being shipped overseas for use as feed for dairy cows.

No. Just no. In all sorts of ways.

Palo Verde Irrigation District alfalfa, Blythe Calif., February 2015, photo copyright Joh Fleck

Palo Verde Irrigation District alfalfa, Blythe Calif., February 2015, photo copyright Joh Fleck

Let’s start with the water use. Alfalfa is a major crop in California, with 780,000 acres under irrigation in the 2012 Census of Agriculture. It does, in fact, use a lot of water, but that is just 10 percent of all irrigated acreage in California. That’s nowhere near enough irrigation to take up “more water than all the other water uses combined.” (Source: Census of Agriculture, tables 9 and 36) That’s not to say that California’s alfalfa crop isn’t big. It is very big. But California’s irrigated agricultural economy is huge, with lots of other crops also being irrigated. There is more California acreage planted in almonds than there is in alfalfa. There is more California acreage planted in grapes than there is in alfalfa. (Source: USDA NASS) The notion that alfalfa is using a majority of California’s water is absurd.

But what of the exports? I tried to do my own calculations recently and came up with about 3 percent of U.S. alfalfa. That was not bad.

“Dr. Alfalfa”, Daniel Putnam at UC Davis, ran the numbers last summer on U.S. exports of alfalfa and other hay crops:

Hay exports historically had never been a large component of US hay markets, and still aren’t.   There was a dramatic change in 2007 with increased foreign demand with the largest growth from the UAE and China.

But even with this rapid expansion, exports are still a tiny fraction of the US of hay market – we calculate that total exports of hay at about 3% of US production, and alfalfa hay at 3.5% of US production in 2014.

A lot of the exported alfalfa comes from the western United States, but still a far cry from the myth’s “most of it” – maybe 11.5 percent of all the alfalfa grown in the west, according to Putnam:

The primary recipients of US-grown alfalfa hay are still domestic dairy producers.

Equity versus efficiency

John Whitehead:

Economists are often bad at considering the distributional impacts of policies: To the point that we often ignore issues of equity in favor of the more objective measure of efficiency.  If two policies were to result in the same net benefits to society, but different distribution of those benefits within society, the efficiency-oriented economist would have trouble distinguishing between the policies.

But what if one distribution of benefits (or costs) is socially preferred to another.  Or put a different way, what if society were willing to forego resources (willing to pay?) to ensure a different distribution of benefits (or costs)?  In that case, the distribution of resources might fit within the realm of the efficiency paradigm as now society can be viewed as better or worse off depending on the distribution of resources.

I think what Whitehead is really saying is that narrow definitions of efficiency may miss non-market values that, when properly considered, might shift the analysis of costs and benefits in a helpful way. In other words, to the extent economists are “ignoring issues of equity”, they’re ignoring important non-market values. There’s a shortcoming in their model.

I am quite literally surrounded by economists as I write this. If you see me fire up a flare, send help, preferably a squad of institutional economists who have thought about this question.

Odds favor wet late winter, spring across Colorado River Basin

With the current snowpack in the Colorado Basin watersheds above Lake Powell at 93 percent of average (source: CBRFC), we’re entering the critical time for the 2015-16 water year on the Colorado River.

Today’s forecast from the federal government’s Climate Prediction Center has the odds tipped toward a wet later winter and spring, but not by a lot:

Feb-Apr forecast

Feb-Apr forecast

The usual explain-this-potentially-misleading-map boilerplate….

The CPC divides the historical record into three bins – the wettest third, the middle third, and the driest third. An “EC” (equal chances) forecast – the white bits – means there’s a one third chance of being in each of the three bins. The dark green (“A”) means there’s a 50 percent chance of being in the wet bin. The lightest green means between 33 and 40 percent chance of wet. So this is a relatively modest shift in the odds toward wet for the Colorado River Basin, not a forecast that it will be wet.